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Britain 26, Us 12, Germany 4, Mr. Speaker 4, America 4, England 3, Imf 2, Northern Ireland 2, U.s. 2, Europe 2, Whitehall 2, Leveson 2, Ann Pruitt 1, Hmrc 1, Darby 1, Hampton Southwest 1, Lupging 1, Rbs 1, Exchequer 1, Abr 1,
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  CSPAN    Today in Washington    News/Business. News.  

    December 5, 2012
    7:30 - 9:00am EST  

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between us is we won the large multinational companies to pay proper taxes here in the u.k.. we believe you do that by having lower tax rate and we reduce the rate of corporation tax but by making sure they declare their income properly. that is why on this specific issue of transfer, companies have been pursuing strange practices to pretend there revenues aren't delivered in the u.k. and run down their tax bills. .. >> the entry of the energy bill to parliament now means we can
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get out there and sell to all of the energy companies the very clear and stable framework that the u.k. has for offshore wind, for nuclear, for renewables and, indeed, for gas. i think it's a very positive development, there's a huge amount of potential, pent-up investment, and we need to make sure that results in british jobs and apprenticeships, and the government is fully committed to making that happen. >> [inaudible] pruitt. >> the prime minister obviously believes within the leveson report, there exists something that is bonkers. how would the prime minister give the views of his planning minister who has said tens of thousands of new homes will have to be built on greenfield sites. >> i think it is absolutely clear, yes, we should build on brownfield land, yes, we should try and deal with the problem of empty homes, but we do have to have a conversation about the need to build more flats and
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more houses, where we don't have the current situation we have where if you don't have the help of mom and dad, people are in their mid 30s. all credit to the planning minister for trying to fix this problem. on the issue of leveson, i actually think there's a wide degree of agreement about what a new regulatory system ought to look like. it's set out there in black and white in leveson. we need to challenge the press to introduce it and, if they don't, obviously, we have to take further action. >> with more men in work than ever before, with more women in work than ever before, with the deficit cut by 25% and interest rates at historic lows, does my right honorable friend not agree with me that the opposition plan b for more debt would jeopardize all those achievements? [cheers and applause] >> my honorable friend is entirely right. we are making progress. of course it is tough when there are so many economic headwinds
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against us, but a million more private sector jobs, a record number of businesses starting up last year, we're on the quite clear, plan b stands for bankruptcy, that's what labour would give us. >> last but not least,up -- ann pruitt. >> a universal health care is what the overwhelming majority of parish people want, something which i remain firmly committed to. however, there are claims about nurses who fail to show care and compassion to their patients. what exactly will the prime minister do about that? >> the honorable lady speaks for the whole house and the whole country in raising this issue, and i know how pain. it must have been -- painful it must have been with what he's witnessed with her or own family. i am, as she is, an enormous fan
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of the point that it is free at the point of use, and my own family has had extraordinary care from our nhs. but we don't do our nhs or, indeed, our nurses if we don't point out there are some very real problems in parts of our health and care systems. as a constituent si mp, i see quite a few letters from people who are not getting the appropriate set of care in hospitals. i set up a forum to discuss with nurses and nurse leaders these issues. there is no silver bullet, no magic wand, but some simple steps like asking every hospital to carry out a friends and family test, asking the patients and the staff would you be happy for your family or your friends to be treated in this hospital, can make a real difference. an hourly rounding -- which is not manager to do with statistics -- but the idea for elderly patients the nurse should be by your bedside once
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an hour checking you've had water, you've had something to eat, you don't have bed sores, we shouldn't have to dictate these things, but i think our nurses can get this sorted out for all our relatives. >> order. statement, the counselor of the excheck kerr. >> mr. speaker, it's taking time, but the british economy is healing. [laughter] after the biggest financial crash of our lifetime, people know that we face each problem at home and abroad. at home we live with the decades of debt and the failure to equip britain to compete in the modern world. and we face a multitude of problems from abroad. the u.s. fiscal cliff, the slowing growth in china, above all the eurozone now in
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recession. people know that there are no quick fixes to these problems, but they want to know that we are making progress, and the message from today's autumn statement is that we are making progress. it is a hard road, but we're getting there, and britain is on the right track. >> will the chancellor resume his seat. now, look, let's be clear about this. the house knows well enough by now that i will afford a very full opportunity for questioning of the chancellor. but the more interruption, the greater the noise, the longer the session will take, and that cannot be right. so i appeal to members, please, to give the chancellor a courteous hearing as, indeed, if it becomes necessary i will appeal to government back benches to afford a fair hearing to the shadow chancellor. that's how it should be.
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the chancellor. >> mr. speaker, britain is on the right track, and turning back now would be a disaster. we have much more to do. the deficit has fallen by a quarter in just two years, and today's figures show it is forecast to continue to fall. exports of goods to the major emerging economies which were pitifully low have doubled since 2009, and since this coalition government came to office, 1.2 million new jobs have been created in the private sector. in a world economy where bond investors are fleeing countries they regard as risky, investment is flowing into u.k. guilds instead of flying from them, and we have to keep it that way. two years ago britain was in the danger zone. now we are seen as one of the safe havens, able to borrow
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money and lower interest rates than at anytime in our history. and today's forecast shows a 33 billion pound saving on the debt interest payments. it was predicted we would have to pay two years ago. that is as much as the entire defense budget. which is why in this autumn statement we showed that this coalition government is confronting the country's problems instead of ducking them. today we reaffirm our commitment to reducing the deficit, setting out the details of our spending plans for 2015-'16 and rolling forward an outlined framework into 2017-'18. we show our determination to do this fairly with further savings from bureaucracy, from the benefits bill and from the better off. we go on equipping britain to succeed in the global race by switching from current spending to capital investment in
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science, roads and education. we offer new support for business and enterprise so they can create the jobs we need. and in everything we do we will show today we are on the side of those who want to work hard and get on. mr. speaker, the office for budget responsibility has today produced its latest economic forecast, and it is a measure of the constitutional achievement that it has taken for granted that our country's forecast is now produced independently of the treasury, free from the political interference of the past. i want to thank robert choate, his fellow members of the budget respondent committee and all their staff for their rigorous approach. one of the advantages of the creation of the abr is that not only do we get independent forecasts, we also get an independent explanation of why the forecasts are as they are.
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if, for example, lower rates was the result of of the government's fiscal policy, they would say so, but they do not. they say the economy has performed less strongly than expected -- >> [laughter] >> they forecast growth this year of -.1%. but in their view, and these are their words: the expected growth can be more than accounted for by net optimism regarding trade because the abr had previously assumed that it would recover in the second half of this year. instead, of course, it has continued to contract. that has hit our exports and markets. tighter conditions and elevated u.k. bank funding costs, and in the obr's words, these problems will constrain growth for several years to come.
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there are domestic problems, too, that they refer to. in the report today the contraction in 2008-2009 is now assessed to be deeper than previously thought. with gdp shrinking by a staggering 6.3%. the largest shock to our economy since the second second world w. in the obr's view, the aftermath of this shock continues to weigh on the productivity of the u.k. economy with credit rationing and impaired financial markets potentially impeding the expansion of successful firms. they say that gdp growth is now expected to be lower in every year of the forecast period as credit conditions take longer to normalize and global growth remains n their words, weaker than previously expected. as a result, the obr forecast that the economy will grow by 1.2% next year, then 2% in 2014,
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2.3% in 2015, 2.7% in 2016 and 2.8% in 2017. so the economy is recovering, and it's recovering more quickly than in of our -- than many of our neighbors. the imf estimateds that the u.k. next year will grow more strongly than france or germany, and our credible fiscal policy allows for supported monetary policy. and with the bank of england, we are directly addressing the problems of tight credit through the 70 billion pound funding for lending scheme. in the opr's view today, this has lowered interest rates in the real economy and will add to the level of real gdp. one area where the british economy has done much better than forecast is in creating jobs. since early 2010 the private sector has created 1.3 -- 1.2 million new jobs, 600,000 more
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than was predicted, and youth unemployment has been falling. instead of peaking at 8.7%, the ob russian expects the peak at 8.3%. this at a time when the unemployment rate in spain is 26%, in france it is almost 11%, and across the whole eurozone it is almost 12%. employment, already at a record high, is set to go on rising each year of the forecast, and for every one job less in the public sector, two new jobs are expected to be created in the private sector. britain now has a greater proportion of its people in work than either the eurozone or the united states of america. mr. speaker, more jobs means that the impact of the weaker than forecast gdp on the public finances have been less than some might have expected. there have been three developments that have each had a significant one-off impact on the public finances, and in the
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report today we publish clearly and transparently the impacts of all three. first, there is the transfer of the royal mail pension fund to the public sector at part of its privatization. this produces a one-off reduction in the deficit of 28 billion pounds this year, but it adds to the deficit in the years afterwards. second, the previous goth had class -- government had classified northern rock asset management as off balance sheet. today it is brought on balance sheet in line with the office of national statistics. this adds about 70 billion pounds to our national debt and reminds us of the price the country is still paying for the failures of the past. third, the government as decided -- has decided, third, the government has decided with the agreement of the bank of england to transfer excess cash held in the asset purchase facility to the exchequer. this is sensible cash
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management, this it is in line h the approach of the bank of japan and the u.s. federal reserve. i welcome the verdict that this is more transparent than the previous approach. i want to make sure its impact on the figures is also completely transparent, so we have forecast the public balances with and without the impact of the apf decision. of mr. speaker, when we came to office, the deficit stood at 11.2%, the highest in our peacetime history. it was forecast to be the largest of any major economy 2349 world. in the last two years, the deficit has fallen by a quarter. today's figures show that with or without the apf coupons, the deficit is forecast to fall this year as well. and cash borrowing is forecast to fall too. last year the deficit was 7.9%. this year with the apf coupons it is forecast to be 6.9%, but
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that excludes the aspect of the royal mail pension access. it will fall to 5.2% the year after, 4.2 president in 2015-'16, before reaching 1.6% in 2017-'18. in 2009-'10 the country was borrowing 159 billion pounds. this year we are borrowing 108 billion pounds. that is forecast to fall to 99 billion next year, 88 billion the year after, then 73 billion in 2015-'16 and 49 billion and 31 billion in the two years around that. these are the central forecasts published by the opr with the asset purchase facility cash transfer included. when the transfer is excluded, as we show in the document, the deficit also falls from 7.9% last year to 7.7% this year,
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then 6.9% next year and falls in every single year after that. and cash borrowing falls in every year as well. now, there are those who have been saying that the deficit was going up this year. indeed, i think i heard it in prime minister's questions. but any way you present these figures, this is not what the obr forecasts show today. they say that the deficit is coming down, coming down this year and every year of this parliament. yes, the deficit is still far too high for comfort. we cannot relax our efforts to make our economy safe. but britain is heading in the right direction. the road is hard, but we are making progress. mr. speaker, unlike the previous government's golden rule, the regime we have set up means that the chancellor is no longer judge and jury of their own fiscal rules. and today the obr have assessed
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us against those rules. first, the fiscal mandate. this is the commitment that we will balance the cyclically adjusted budget over the coming five years. i could tell the house that the obr have assessed that we are, in their words, on course to meet our fiscal mandate. in other words, we have a better than 50% chance of eliminating the structural current deficit in five years' time. that part of our borrowing that doesn't recover automatically as the economy grows. now, this is true, again, with or without the there are of the coupons. so we will meet our fiscal mandate. but the obr assess in their central forecast that we do not meet the supplemental objective that aims to have debt falling by 2015-'16. the point at which debt starts to fall has been delayed by one year to 2016-'17. and the obr's central forecast is that net debt will be 74.7% this year, then 76.8% next year,
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79% in 2014-'15 before falling in 2016-'17 and 77.3% in 2017-'18. in short, the tougher economic conditions mean that while our deficit is set to go on falling, instead of three years, it's going to take four. now, mr. speaker, confronted with this use some say -- with this news, some say we should try to borrow more. they think by borrowing more we can borrow less. that would risk higher interest rates, more debt interest payments and a complete loss of britain's face fiscal -- fiscal credibility. we are not taking that road to ruin. now, then there are those who say that despite all that has happened in the world this year, we should cut even more now to hit the debt target.
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that would require 17 billion pounds of extra cuts a year, and let me explain why i've decided not to take this course. we've always argued we should let the automatic stabilizers work. we have not argued we should chase down a cyclical -- [inaudible] in the economy, particularly one which our own independent body stays is largely driven by problems abroad. that is also the judgment of the the imf, the oecd and the governor of the bank of england. our aim is to reduce the structural deficit, the permanent hold in our public finances that won't be repaired as the economy recovers. and we are. we've cut the structural deficit by three percentage points in the last two years, more than any other g7 country, and it is set to go on being cut at a similar rate in the years ahead. this lower deficit is delivered by our public spending plans, and we are going to stick with those plans. overall, we are not going faster
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or slower with those plans. the measures i will announce in this autumn statement are fiscally neutral across this parliament. and there is no net rise in taxes today. any taxes increased are offset by taxes cut. mr. speaker, in last year's autumn statement we committed the government to maintain the same pace of consolidation for two further years beyond the end of the current spending review into 2015 and 2016-'17. in this year's autumn statement, we extend the consolidation for one further year into 2017-'18. the obr projects that as a result the share of national income spent by the state will fall from almost 48% of gdp in 2009-'10 to 39.5% by 2017-'18. the document shows total managed expenditure will continue to fall and will now be 4.6 billion
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lower in 2017-'18 than if it had been held flat in real terms. no decision to cut spending is ever easy, but those who object must explain whether instead they would have higher taxes or higher borrowing or both. i also provide further detail of the consolidation plans for 2015-'16, the last year of this parliament. i said two years ago that the correct balance for our fiscal consolidation between spending and tax should be 80 clash 20. i -- 80/20. i can confirm by the end of 2015-'16, the decisions we announce today will almost exactly deliver on that 80/20 mix. total spending will fall in that final year of this parliament at the same rate as through the current spending review. i can confirm today that the overall envelope for total managed expenditure will be set at 745 billion pounds.
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we start with the working assumption that departmental resource totals will continue on the same trajectory as over the current spending review. the detailed departmental spending plans for 2015-'16 will be set at a spending review which will be announced during the fist half of next year. what we do today is take steps now to help deliver those spending plans and go on reducing the deficit in a way that is fair. this government has shown that it is possible to restore sanity to the public finances while improving the quality of our public services. crime has fallen, hospital waiting lists are down, school standards are up, and this is with a civil service that is to date smaller than at anytime since the second world war. we are today publishing the reports we commissioned from the pay review bodies on market facing pay. we commit to implement these
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reports. this means continuing with national pay arrangements in the nhs and prison service, and we will not make changes to the civil service arrangements either. but the schoolteachers' review body does recommend much greater freedom to individual schools to set pay in line with performance, and the education secretary will set out how this will be implemented. through the efforts of individual government d.s and the support of the chief secretary and my right honorable friend, the minister for the cabinet office, we have already generated 12 billion pounds of efficiency savings. but we believe there is room to do even more. if all departments reduce their spending on administration in line with the best performing departments like education and communities and local government from another one -- then another one billion pounds could be saved. if all departments made greater provision of digital services, rationalized their property
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estates have some have done, then a further one billion pounds could be saved. so today we are reducing departmental resource budgets by 1% next year and 2% in the year after. we will continue to seek efficiency savings in the nhs, in our schools, but that money will be recycled to protect spending in these priority areas. local government budgets are already being held down next year to deliver the freeze in counsel tax, so we will not seek the additional 1% saving next year, but we will look for the 2% saving the year after. and while the ministry of defense is included in these measures, they will be given flexibility on their multiyear budget to insure this will not lead to reductions in military manpower or the core defense equipment program over the parliament. a mark of our values as a society is our commitment to the world's poorest. we made a promise as a country that we would spend .7% of our gross national income on international development.
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and i am proud to be part of the first british government in history which will honor that commitment and honor it as promised next year. we will not, however, spend more than .7%. so as we did last year, we will adjust the budget to reflect the latest economic forecast. in the medium term, these savings across whitehall will help the trajectory for the years that follow the spending review and help us pay off the deficit in the future. in the short term, i'm switching these current savings into capital. all the money saved in the first two years will be reinvested as part of a five billion pound capital investment in the infrastructure of our country. so despite, mr. speaker, the fiscal challenges we face, public investment as a share of gdp will be higher on average in this parliament than it was under the last labour government.
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it is exactly what a government equipping britain to compete in the modern global economy should be doing. we're committing an extra billion pounds to roads, including four major new schemes to upgrade key sections of the a1 bringing the route from london to new castle up to standard, lupging the a5 with the m1 and upgrading the m35 which will support the biggest port development in europe, and i pay tribute to my honorable friend for the campaigning she's undertaken to achieve this. we've already set our plans this autumn for a huge investment in rail, and my right honorable friend the transport secretary will set up plans in the new year plans to take high speed go to yorkshire. i can confirm a billion pound loan and a guarantee to -- [inaudible] and support a new development on a similar scale to to olympic park.
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we're confirming funding and reforms to assist the construction of up to 120,000 new homes and delivering on flood defend schemes in more cities. on top of broadband expansion for our countryside and larger cities, we're funding broadband in 123 smaller -- 12 smaller cities, cambridge, darby, oxford, portsmouth, york, newport, aberdeen, and derry, londonderry. in addition to a third of a billion pounds announced this autumn for british science, we are today announcing 600 million pounds more for the u.k. scientific research infrastructure, and since improving our education system is the best investment in a competitive economy, i am today committing 270 million pounds to fund improvements in further education colleges and one billion pounds to expand good schools and build 100 new free schools and academies. [cheers and applause]
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mr. speaker, scotland, wales and northern ireland will get their share of additional capital spending put at their disposal as involved in administrations. on top of this five billion pounds of support for business, we are ready to provide guarantees for up to 40 billion pounds more. today i can announce the projects worth 10 billion pounds are prequalified, we're offering guarantees for housing two. our country's pension funds will launch their new investment platforms next year as well, and we have today published full details of the replacement for the discredited pfi. since we can all see now that the public sector was sharing the risk, we will now insure we also share in the rewards, and i commend my honorable friend for his work in this area. taken together, this is a
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revolution in the sources of finance for upgrading britain's infrastructure and equipping britain to win in the global race. annual average infrastructure investment which was 29 billion pounds under the last labour government is now 33 billion pounds. now, savings from whitehall are not enough by themselves to tackle our debt. we need to find other savings, and we need to do it in a way that is fair. those with the most should contribute the most, and they will. but fairnesses is also about being fair to the person who leaves home every morning who goes out to work and sees their neighbor still asleep live ago life on -- [inaudible] as well as a tax system where the richest pay their fair share, we have to have a welfare system that is fair to the working people who pay for it. mr. speaker, let me start with tax. the vast majority of people, rich or otherwise, pay their taxes and make their
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contribution. but there are still too many who illegally evade their taxes or use the aggressive tax avoidance in order not to pay their fair share. this government has taken more action against these people than any before it. prosecutions for tax evasion are up 80%. we will collect seven billion pounds more a year in tax that is due than the last government. we are increasing by around two and a half thousand the number of tax inspectors going after evaders and avoiders, and next year we will introconstitution the first -- introduce the first-ever general anti-abuse rule, something that never happened in 13 years before we came to office. and next year for the first time in our history money will be flowing from bank accounts in switzerland to britain instead of the other way around. because of the treaty we've signed, we expect to receive five billion pounds over the next six years from the indices closed swiss -- undies closed swiss bank accounts of u.k.
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residents. the largest tax evasion settlement in history. hundreds of millions of pounds of tax loopholes are being closed with immediate effect, and we are investigating abusive use of partnerships. hmrc will not have its budget cut over the next two years unlike other d.s. instead, we will spend 77 million pounds more on fighting tax avoidance and not just for wealthy individuals. we want the most competitive corporate tax system of any major economy in the world, but we expect those corporate taxes to be paid. so today we're confirming that we will put more resources into insuring multi-national countries pay their proper share of taxes, and we are leading the international efforts to prevent artificial transfers of profits to tax havens with germany and now france. we have asked the oecd to take this work forward, and we will make it an important priority of our g8 presidency next year. in total we expect the action we
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announce today will increase the amount of money collected from tax evasion and avoidance by a further two billion pounds a year. third and necessary as this is, it is not by itself to close the deficit. we need to ask more from the better off. punitive tax rates do nothing to raise money and simply discourage enterprise and investment in britain. other countries on our doorstep are trying that approach and are paying the price. and we're not going to make that mistake. hmrc data reveals that in the first year of the 50% tax rate, the number of people declaring incomes of over a million pounds fell by a half. a tax rate on the rich, that raises almost no money, is a tax con. we're going to have a tax rate of tax that supports enterprise, and we're going to raise more money from the rich. here is a simple fact. the richest will pay a greater share of income tax revenues in every single year of this
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coalition government than in any one of the 13 years of the last labour government. but we need to make sure -- [inaudible] deficit reduction remains fair. we need to raise more. now, we've already -- mr. speaker. we've already raised -- [inaudible] on multimillion pound homes and next week publish the legislation to stop the richest avoiding stamp duty. but we won't introduce a new tax on property. this would require or a revaluation of hundreds of thousands of homes. in my view, it would be intrusive, expensive to levy, raise little, and the temptation for future chancellors to bring ever more homes into its net would be with irresistible, so we're not having a new homes tax. we have in this parliament already reduced the amount of tax relief we give to the very largest pension pots.
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from 2014-'15, i will further reduce the lifetime allowance from 1.5 million pounds to 1.25 million pounds and reduce the annual allowance from 50,000 pounds to 40,000 pounds. this will reduce the cost of tax relief to the public purse by an extra billion pounds a year by 2016-'17. 98% of people currently approaching retirement have a pension pot worth less than 1.25 million. indeed, the median pot for such people is just 55,000 pounds. 99% of pension savers make annual contributions of less than 40,000 pounds. the average contribution to a pension is just 6,000 pounds a year. now, i know these tax measures will not be welcomed by all. ways to reduce the deficit never are. [laughter] but we must demonstrate that we're all in this together --
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together --ing. [inaudible conversations] mr. speaker, i want to help the great majority of savers. that's why we're introducing a generous new single-tier pension, so the people know it always pays to safe. that's why i will upgrade next april the overall isa limit to 11,520 pounds, and we will consult allowing investment in sme equity markets to be held directly in stocks and shares isas to encourage investment in growing businesses. i've also listened to concerns from pensioners about drawdown limits. i am today announcing that the government will raise the capped drawdown limit to 120% giving pensioners the option of increasing their income. mr. speaker, it's also fair to look at the way we uprate benefits and can some tax
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thresholds. the basic state pension has this year gone up by the largest cash amount in its history. next year thanks to our triple lock, i confirm it will rise by 2.5%, higher than either earnings or inflation. that takes the level of the basic state pension to 110 pounds, 15 a week. when it comes to working age welfare, we've already made substantial reforms. 18 billion pounds a year has been cut from the welfare bill. benefits are being capped for the first time, so families out of work will not get more than the average family gets for being in work. we've increased efforts to fight welfare fraud. today we announce further measures and checks to save over a billion pounds in the next four years by reducing fraud, r record and debt in the tax credit system. next year my right honorable friend will introduce the new universal credit so that it always pays to work.
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and today we set key parameters such as the levels of earnings disregards. but we have to acknowledge that over the last five years those on out of work benefits have seen their incomes rise twice as fast as those in work. we pay restraint in businesses and governments. average earnings have risen by around 10% since 2007, out of work benefits have gone up by around 20%: that's not fair to working people who pay their taxes. those working in the public services who have seen their basic pay frozen will now see it rise by an average of 1%, and a similar approach of a 1% rise should apply to those in receipt of benefits. that's fair, and it will insure that we have a welfare system that britain can afford. we will support the vulnerable, so disability benefits including disability elements of tax credits will be increased in line with inflation. and we're extending support for mortgage interest for two more
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years. but most working age benefits, including job seekers' allowance, employment and support allowance and income support, will be operated by 1% for the next three years. we will also uprate elements of the child tax credit and the working tax credits by 1% for the next three years, although previously-planned freezes will go ahead. local housing allowance rates that are a central component of housing benefits will be uprated in line with the existing policy next april, and then we will cap increases at 1% in the two years after that. for this measure 30% of the savings will be used to exempt from the new cap those areas with the highest rent increases. the earning disregard for universal credit will also be uprated by 1% for two years from april 2014. child benefit is currently frozen. it, too, will now rise by 1% or for two years from april 2014. let me be clear, operating
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benefits at 1% means people get more cash, but less than the rate of inflation. and taken together, we will save 3.7 billion pounds in 2015-'16 and deliver permanent savings each and every year from our country's welfare bill. to bring all these decisions for many benefits over many years together, we will introduce into parliament primary legislation, the welfare operating bill, and i hope it commands support from both sides of the house. [inaudible conversations] now, mr. speaker, we will apply a similar approach to the uprating of some of our tax thresh holds as we have to welfare. the higher rate threshold will be increased by 1% in the tax years 2014-'15 and 2015-'16. so the income at which people
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start paying the 40% rate will go up from 41,450 pounds to 41,865 pounds and then to 42,285 pounds. i want to be completely clear with people. this is an increase, in fact, it's the first cash increase in the higher rate threshold in this parliament, but it's not an increase in line with inflation, and so it raises one billion pounds of revenue by 2015-'16. again, there are no easy ways to reduce the deficit, but from year to year no one will pay a penny more in income tax in the same way the capital gains tax annual exempt amount will be increased by 1% over the same period reaching 11,100 pounds, and the inheritance tax band rate which has been frozen since 2009 will be increased by 1% in 2015-'16 to 329,000 pounds. taken with the welfare operating decisions, this is a fair
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approach to paying off print's debt. but dealing with those debts is only one part of making britain fit to compete in the global race. countries like ours risk being outsmarted, outworked and outcompeted by new, emerging economies. we asked michael he is l tine to report on how to make the government work better for business and enterprise. i think it's fair to say that his answer has captured the imagination of all political parties. we will respond formally in the spring, but here is what we will do now. first, government spending should be aligned with the priorities of the local business community. we will provide new money to support the local enterprise partnerships, and from april 2015 the government will place more of the funding that currently goes to local transport, housing, skills and getting people back to work into a single pot that -- [inaudible] details will be set out in the spending review. before then we are putting more money into the regional growth
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fund which is helping businesses create half a having new jobs. second, as the lord also recommends, we're going to support industries and technologies where britain has a clear advantage with my right honorable friend the business secretary's support, we will extend our global lead in aerospace and support the supply chains of advanced manufacturing. we're also taking big steps to support british companies to export to asia, africa and the americas. i am increasing the funding for ukti by over 25% a year so it can help more firms build the capacity of overseas british chambers and maintain our country's position as the number one destination in europe for foreign investment. and we are launching a new one and a half billion pound export finance facility to support the purchase of british exports. third, we are addressing the credit problems for companies, we're creating a new business bank, and today we confirm we're providing it with one billion
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pounds of extra capital which will lever private lending to help small and medium-sized firms and bring together existing schemes. and, fourth, we are going to cut business taxes still further. let me tell you how. the temporary doubling of the small business rate relief scheme helped over half a million small firms with 350,000 firms paying no rates at all. the last government were going to end it in september 2011. we've already exended it til -- extended it til next april, and today i extend it for a further year, to april 2014. we also today confirm tax relief for our employee shareholder scheme. the energy bill provides certainty and support for billions of pounds of investment in renewable energy. today we publish our gas strategy to insure we make the best use of lower cost gas power, including new sources of gas onto the land. we are announcing the creation of a single office so that
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regulation is safe but simple. we don't want british families and businesses to be left behind as gas prices tumble on the other side of the atlantic. we need to help our construction industry too. the last government abolished empty property relief, and as excellent work done by the members for york, hampton southwest and others show this has blighted development in our towns and cities. the proposal from my colleagues that we create a long grace period before newly-completed buildings have to pay empty property rates is a sensible one, and we will introduce it next october. the previous government also planned to increase the small company's tax rate to 22%, and we have cut it to 20%. but i'd like to help small and medium-sized firms more, and i want to thank my honorable friends for their thoughts in this area. starting on the 1st of january and for the next two year, i am,
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therefore, going to increase by tenfold the annual investment allowance in plants and machinery. instead of, instead of 25,000 pounds worth of investment being eligible for 100% relief, 250,000 pounds worth of investment are eligible. this capital allowance will cover the total annual investment undertaken by 99% of all the business in britain. it's a huge boost to all those who run a business, who aspire to grow and expand and create jobs. mr. speaker, i also want britain to have the most competitive business tax regime of any major economy in the world. i have already cut the main core rate of corporation tax from 28% to 24%, and it's set to fall further to 22%. this has helped british companies and, frankly, left other countries scrambling to keep up.
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they will have to try harder, for i am today cutting the main rates of corporation tax again by a further 1%. [cheers and applause] in america the rate is 40%. in france it is 33%. in germany it is 29%. from april 2014 the corporation tax rate in britain will stand at 21%. [cheers and applause] this is the lowest rate of any major western economy. it is an advent for our country that says come here, create jobs here, britain is open for business. [cheers and applause] mr. speaker, we will not ask the benefit of this reduced -- pass the benefit of this reduced rate on to bank, and the bank levy rate will be increased to 0.190% next year, making banks contribute more is part of our major reforms to the banking system. we also have to be on the side of those who want to work hard and get on.
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i know how difficult many families have found the cost of living. in dealing with the deficit, we've had to save money. but whenever we've been able to help, we have. we've helped councils freeze council tax for two years running. and we're helping them to freeze it again next year. we put a cap on rail fare rises for the next two years so commuters are not punished for traveling to work. we're forcing energy companies to move families onto the lowest terrace for their gas and electricity bills, and we've helped motorists with the costs of petrol. we've canceled the last government's escalator -- [inaudible] fuel is ten pence per liter cheaper than it would have been -- [inaudible] and i want to keep it that way as i note to my colleagues like my honorable friend -- [inaudible] there is a three pence per liter
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rise planned for this january. now, some have suggested that we delay that three pence rise until april. i disagree. i suggest we cancel it altogether. [cheers and applause] there will be no three pence fuel tax rise this january. that is real help with the cost of living for families as they fill up their cars across the country, and it will help businesses move. and it means that under this government we'll have had no increases in petrol taxes for nearly two-and-a-half years. [cheers and applause] in fact, they've been cut. mr. speaker, we've also helped working people by increasing the amount they can earn before paying any income tax. when this coalition government came to office, the personal tax allowance stood at just 6,475 pounds. next april it is set to rise to 9,205 pounds. 24 million taxpayers have seen their income tax cut, two
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million of the lowest paid have been taken out of tax altogether. [cheers and applause] and because of the pivotal decisions we've taken today, we can go even further. from next april the personal allowance will rise by a third of 235 pounds, that means the total increase next year of 1,335 pounds, the highest cash increase ever. people will be able to -- [cheers and applause] people will be able to add 9, 440 pounds before paying any income tax at all. this is a direct boost to the incomes of people working hard to provide for their families. it's 47 pounds extra in cash next year. in total it's 267-pound cash increase next year. people working full-time on the minimum wage will have seen their income tax bill cut in half. [cheers and applause] and we are within touching distance of the 10,000-pound personal allowance. and at this time i propose to
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extend the benefits of this further increase to higher rate taxpayers. that decision will stand alongside the decision i've had to take on uprating, meaning that in real terms a typical high-rate taxpayer will be better off next year and no worse off in total by the year after. mr. speaker, today we have helped working people, but i do not want to distract from the tough economic situation we face in the world. the public know there are no be miracle cures -- no miracle yours, just the hard work of dealing with our deficit and insuring britain wins the global race. that work is underway. the deficit is down. borrowing is down. jobs are being created. it is a hard road, but we are making progress, and everything we do we are helping those who want to work hard and get on. thank you! [cheers and applause] >> [inaudible] >> mr. speaker, today, today
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after two and a half years we can see and people can feel in the can country the true scale of this government's economic failure. our economy this year is contracting. the chancellor's confirmed government borrowing is revised up this year, next year and every year. the national deficit is not rising -- is rising -- [cheers and applause] i'll say it again, i'll say it again. our economy is contracting this year, government borrowing and the deficit is revised up this year, next year and every year, and the national debt is rising, it is not falling. and it is people already struggling to make ends meet, middle and lower income families and pensioners, who are paying
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the price. while our millionaires get a tax cut, a three billion pound welfare handout to the people who need at least -- mr. speaker. let me spell out the full costs to the house. they should listen, they might learn something, mr. speaker. [cheers and applause] in june 2010 the office of budget responsibility forecast our economy would grow by 2.8% this year. in march of this year, they said trillion dollar still with growth -- still be growth, but they revised it down. today we learn the chancellor's not even managed that. growth has been downgraded yet again. but he's confirmed following the double-dip recession that our economy is now forecast to actually contract inside this year. [inaudible]
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let me remind the house what the chancellor promised over two years ago in the june budgeted. he said we have provided the foundations for economic recovery in all parts of our nation. [laughter] he said we have set the course for a balanced budget and falling national debt by the end of this parliament. and he said the richest paying the most, the most vulnerable protected. [laughter] that was the promise be, mr. speaker. but far from securing our recovery, our economy has flatlined since the spending in 2010. over the last two years, the chancellor was expecting 4.6% growth. he's actually achieved -- [inaudible] compared to 1.7 in prance, to 3.6 in germany and to 4.3% in america -- 4.1% in america, falling behind in the global race, mr. speaker.
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[cheers and applause] and what we learned today is that growth has been downgraded this year, next year, the year after, the year after and the year or after that too. mr. speaker, the longest double-dip recession since the second world war now followed by the slowest recovery in the last hundred years. and we were told that this stagnation, rising long-term unemployment, long-term damage to our economy, falling behind now as other countries move ahead is the chancellor's fiscal strategy has been complete ri derail -- complete hi derailed, mr. speaker. the defining purpose of a government, the -- [inaudible] the one test they set themselves to balance the books and get the debt falling by 2015 is now in tatters, mr. speaker. what we've learned today is that borrowing, that government borrowing has been revised up this year, next year and the
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year after that. we now know, we now know that compared to the chancellor's forecast two years ago, borrowing is now forecast to be well above the 150 billion pounds of extra borrowing that he was forecasting in march. and they should listen to this. the chancellor, the chancellor's confirmed, the chancellor's confirmed that the prime minister's pledge to balance the books in 2015 is not met in 2015, it's not met in 2016, and it's not met in 2017 either. the fact is there is more borrowing this year, next year and the year after, mr. speaker. now, i have to say we will look, we will look in detail when we get the figures, because it was very -- [laughter] it was very disappointing, mr. speaker, the chancellor failed to give us the cash figures
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adjusted for borrowing this year, next year and the year after. the unusual thing is that just a few weeks ago the independent forecasters were saying that borrowing would be six billion higher this year. we will examine the detail of those figures to see whether there has been any dodgy dealing, mr. speaker. we will find out in the coming hours -- [inaudible conversations] but i don't know, i don't know, mr. speaker, i don't know because i've not seen the figures. all i do know is there is more borrowing this year, more borrowing next year and more borrowing the year after, and the result of that, the result of that is that the obr now shows more borrowing and higher deficits means higher national debt, mr. speaker. the national debt, the party should listen to this. it might be rather shocking to find out. national debt is going to be
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higher at this end of -- at the end of this parliament than forecast in the plans he inherited, and it's to longer falling as a percentage of g,dp. it's rise anything 2015, and it's rising again in 2016, too, breaking the fiscal rule for falling debt upon which this chancellor said his entire credibility depended. in last year's budget, mr. speaker, in last year's budget the chancellor said our deficit reduction plan is on course. we will not waver. on course? not wavering? he's not wavering, he's drowning, mr. speaker. [cheers and applause] and now, mr. speaker, the chancellor, the chancellor's now trying to create -- he's now trying to claim his failure on growth and his failure on
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borrowing and the debt, breaking his own fiscal rules. he's trying to claim it's not his fault. that no one could -- that no one could have foreseen it. what nonsenses, mr. speaker. because he was warned, mr. speaker, he was warned that a tough medium-term plan to cut the deficit, tax rises, spending cuts that every country had to put in place could only work if the government first put in place a plan for jobs and growth. he was warned it was a huge gamble to go too far too fast and allow exports to bail him out. he was warned -- [inaudible] and that was not the time to rip out the foundations in britain. once again, once again the chancellor is trying to blame high oil prices and the eurozone crisis for negative growth this year. but it affected all countries, mr. speaker.
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it affected all countries. so why over the last -- >> order, order, order. i apologize for interrupting. members must calm themselves. mr. biles, i thought you were normally a model of restraint. [laughter] and civility. good heavens, man, i don't know what's come over you. [laughter] calm yourself! take a pill if necessary. [laughter] but keep calm, take up yoga. [laughter] >> growth down, borrowing up, debt up. they don't like it, mr. speaker, do they? they don't like it at all. [laughter] once again the chancellor's trying to blame high oil price ands the eurozone crisis. so let me ask him, why over the last two years has britain grown by just one-tenth of the growth rate of the g20 countries, mr. speaker? and why is growth here in britain been even slow or than
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in the eurozone, mr. speaker? mr. speaker, it's not the rest of the world's fault, it's his policies which have failed. he claims that rising -- [inaudible] alongside accelerating spending cuts would boost confidence, secure recovery and get the deficit down. but they depress confidence, choke the recovery and borrowing's been revised up, mr. speaker. let me ask the chancellor whatever happened to his treasury view, his theory of expansionary fiscal contraction? it's the economy which has contracted, and the borrowing and the debt which has expanded, mr. speaker. that's the truth. and i have to say when now the latest figures show business confidence falling, when the world economy is slowing, when the eurozone is in such chronic difficulty, the chancellor's fiscal straitjacket tightens further next year. it is simply reckless and deeply
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irresponsible for this chancellor to plow on with a fiscal plan we all know is failing on the terms he's set. that's the truth. and what a wasted opportunity this statement was. can the chancellor confirm the independent obr, look to the measures he's announced today and their verdict -- [inaudible] growth revised down this year, next year and the year after, mr. speaker? let me congratulate the chancellor for taking our advice and stopping january's fuel rise. [laughter] even though they all voted against it just a month ago, they all voted against it, and we are, we welcome, and we welcome -- [inaudible] if part, the u-turn on regional pay bargaining in the nhs, the u-turn on capital allowances.
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after churches, charities -- [inaudible] i think it's catching on, mr. speaker, this u-turning. whatever happened to the plan for the business investment bank? and after yesterday's announcement on infrastructure spending, the extra monies for schools is just a fraction of the cuts and the cancellation of buildings for the future. and we've opinion, we've been here -- we've been here before. a year ago -- [inaudible] boasted of a national infrastructure plan. twelve months on, not a single road scheme has even started, mr. speaker. why can't he see he won't get the deficit done without a man for jobs and growth -- a plan for jobs and growth? why is he not using the 4g money to get 100,000 new homes built? why not attempt tax cuts for families, even the mayor is supporting that, mr. speaker. why not -- [inaudible]
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the chancellor says he can't do any of this because it would lead to higher borrowing, mr. speaker. even his political attacks are backfiring. this chancellor's failed plan has given us more welfare spending, has given us higher borrowing and higher debt too. mr. speaker, the truth is he's failed on growth of the deficit and what's his answer? more of the same. let me remind the chancellor what he told the house in the budge in 2011. he said -- in the budget in 2011. he said we have already asked the british people for what is needed, and we do not need to ask for more. but 18 months on the chancellor's come back for more. [inaudible] not the 8,000 millionaires set to get over 100,000 pounds each in april. i have to say to liberal democrats, whatever happened to the mansion tax?
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and they may realize even with these changes in the -- [inaudible] the other things they've supported mean to the average family with children of 20,000 pounds is worse off, mr. speaker. and that's before the rise. the chancellor claims his revision to a -- [inaudible] can he confirm that one billion pounds he's raising is less than the 1.6 billion pounds that he gave back in pension tax rates in june 2010 in and it's just a fraction of the top rate tax cut, a three billion tax cut while at the same time the chancellor is cutting tax credits for working families, cutting child benefits for middle income families, raising taxes on pensioners in april and cutting benefits for the unemployed. mr. speaker, we do need to reform and modernize our welfare state and reduce its cost. those who work, those who can
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work should work, no ifs or buts. we support a benefit cap on -- [inaudible] but let us be clear, let us be clear, the chancellor claims he would cut the welfare bill but higher inflation and long-term unemployment means the bill is set to be higher than the chancellor boasted. let me help him, mr. speaker. welfare to work. the clue is in the name, mr. speaker. [cheers and applause] you can't have a successful welfare to work program without work, mr. speaker. and we know that the work program has just totally failed. with only two people in a hundred actually going into permanent jobs. we should be, mr. speaker, we should be requiring every young and long-term -- [inaudible] take a job and making sure there is one there.
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but let me ask the chancellor about the nurse. one of the thousands cut from the nhs in the last two years, now struggling to find a new job. for that nurse he has announced today he is cutting her job seekers' allowance for the next three years. how can that be fair when he's cutting the top rate -- [inaudible] how can that be fair, mr. speaker, when someone earning 228,000 pounds a year will get a top rate tax cut of 75 pounds a week in april which is more than the 71 pounds the nurse gets to live on in -- [inaudible] mr. speaker? and i have to say what we've learned today is not just hitting those looking for work, the majority of people who lose from his cuts to tax credits are people in work. millions of families strifing
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hard -- striving hard to do the right thing, mr. speaker. what kind of government believes you can only make low-paid working people work harder by cutting their tax credits, but you only make millionaires work harder by cutting their taxes, mr. speaker? i tell you, that's not a one nation government, mr. speaker. they must really believe if you cut taxes at the top, the wealth will trickle down. let me remind the house what the chancellor said to the conservative party conference in october 2009. he said we could not even think, we could not even think of abolishing the 50p rate on the rich while at the same time i'm asking many of our public sector workers to accept a pay freeze to protect their jobs. the chancellor's words. he said i think we can all agree that would be grossly unfair. what changed? what changed? fog has changed.
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nothing has changed. it was all a con. and we now know this chancellor can't say we're all in this together without a smirk on his face, mr. speaker. [cheers and applause] they wanted us to see they're compassionate conservatives, now we find out they're the same old conservatives, and the liberal democrats have gone on with all of it yet again. may i say, mr. speaker, what a pity. not to see the honorable member -- [inaudible] in her place. but from the jungle she may not have succeeded in talking for the nation on many things, but she did speak for the nation when he called the prime minister and the chancellor two arrogant -- [inaudible] [cheers and applause] mr. speaker, no wonder, no wonder this prime minister keeps on losing his temper, mr. speaker. because his worst nightmare is
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coming true. not snakes and spiders in the jungle, but their fiscal rule broken, their economic credibility in tatters, exposed now as incompetent and unfair. yes, mr. speaker, he's the chancellor. can't someone get him out of here? [cheers and applause] mr. speaker -- [inaudible] revised up, the fiscal rules broken on every target they set themselves failing, failing, failing, cutting the nhs and not the deficit over 212 billion pounds more borrowing than they promised two years ago, cutting taxes for the rich while struggling families and pensioners pay the price. unfair, incompetent and completely out of touch! [cheers and applause]
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>> now, mr. speaker, there's only one person in this chamber who's drowning, and that is the shadow -- [cheers and applause] that was the worst reply to an awesome statement i have ever heard in this house. [cheers and applause] and, you know what? if one thing changes as result of this autumn statement, it might be a shadow cabinet reshuffle. [cheers and applause] he said one thing that was true. he said it right at the beginning, and he said the national deficit is not rising. but that was the one thing he said that was true. it was a freudian slip, but it betrayed the fact that he's written his response before he heard, before he heard my autumn statement and before he looked at the obr forecast. and let me tell him, we don't -- [inaudible] the numbers in the treasury income. that was when he was in the treasury. we have an independent office
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for budget responsibility, and that is the problem he's got. his whole policy was about complaining that borrowing was going up, the deficit was going up. that's not what the obr forecasts show. and, indeed, his prescription is to borrow even more. he complains about debt, he wants to put debt up. it is completely hopeless. he talked about the substance of policies. here are some very simple points that the labour party are going to have to answer. if they are against the cuts in the income tax rate from 50 pence to 45 pence, will they reverse it? it's the simplest possible question. the leader of the opposition says it hasn't come in yet. it is coming in. it's been legislated for. so the question for him, if he's so against it, if he thinks it's a moral outrage, will he commit to reverse it, yes or no? [inaudible conversations]
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hopeless position number one. on welfare benefits, the shadow chancellor railed about welfare benefits. i've got a simple question again: will they support us or vote against a welfare uprating bill? what are they going to do on that? are you going to vote for the bill or against the bill? it's a very simple question. we've got now for the very first time spending plans for 2015-'16. he said nothing about whether he supports those plans each though he hopes to be the chancellor during that year. does he support those spending plans? he didn't say anything about that. he said, he talked about the 3g, and they're shouting at me -- the 4g license, yes. the 4g license. we're using the 4g license. he wanted -- okay, let me say something about the -- can i say something about the 4g license? you've had 20 minutes, you didn't make any points at all.
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[laughter] we are using the 4g money in part for new capital spending including building fe colleges, one of which is called the leeds city college in a town called morley in west yorkshire. i'm not sure what the local mps would make of the shadow chance already's decision that that's not the best use of the money, but he can look at himself in the mirror and ask the question. he can't answer these basic questions. and let me come down, let me end by making this final point. he tries to claim, he tries to claim that all the problems in britain, all the problems in britain began in the may 2010, that they're all the fault of this government. literally only the people in the -- [inaudible] claim that. there is not a single person in the labour party, there is not a single person in any business organization, there's not a single person in any of the international bodies who believes that.
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and the reason he has to maintain this completely incredible position is because if he admitted that the previous government was responsible for the problems in our country, he would have to admit that he was responsible for the problem. and so out of necessity, not choice, the labour party leader has a shadow chancellor who is more associated with the economic mismanagement that led to britain's problems than anyone else in britain. he will not let his party move on, he is a man trapped in the past. the one thing the opposition needed to say is we're sorry, we've spent too much, we've borrowed too much, we won't do it again, and that, mr. speaker, is the one thing the shad toe chancellor cannot -- shadow chancellor cannot say. until he does, the british public are never going to trust him or the labour party with their public finances again. ..
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>> have got a job as a result. that's 3% on the work program, less than 2% of the long-term use unemployed. will the chancellor no agreed without -- will the chancellor now agree without points scoring to look at -- to look at the level of the wage subsidy to incentivize pay cuts, to look at the structure of the work program so it is not squeezed out and the role of a part-time job guaranteed to give hope to these young people? >> the chancellor of the exchequer? >> the right honorable gentleman does often have interesting and intelligent things to say about well for work programs and i'm happy to look at specific points he makes. i read some of the work he has done this you. i guess it was quite a good job from the shadow chancellor.
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[laughter] >> mr. john redwood. >> being sensible about money and credit to feel the private sector recovery has the chancellor update us on when rbs may be in a position to increase the balance sheet to make the phones available, when it might start to make a profit for the taxpayer and when -- when you consider the comment of those of us who think he does need to be split up to have more plentiful banking? >> again, i very much respect my right honorable friend's observations on the problems in our banking system. there is an aggressive plan to reduce the bad bank elements of rbs. that plan is on track. but as i said to this house earlier i wanted to proceed -- see more done and rbs is reducing the size by considerably of its investment bank. and, of course, it's also had advice recently from the financial policy committee. had to take that advice into
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account. >> mr. speaker, if i understood the chancellor correctly, the profile of rising growth in announce today looks remarkably similar to the same profile be announced in 2010 which failed to materialize. that, of course, is one of the reasons he has missed the debt target. could he tells why we should anymore conference the next set of figures which show recovery albeit a sliver server years? all of the capital projects he announce today which of the many of us -- can he tell us how many of those will start this year? >> the first thing i would say to the right honorable gentleman is that the forecast we produce our independent. they are produced by the office of budget responsibly. so this is the obr's best as can i was going to happen to gdp over the next few years. of course as the obr themselves say, the reason why the forecast a few years ago were wrong was to do three things.
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one is the impact of the financial crisis was greater than they had assessed. second, there was an oil price shock in 2011 which hit all their oil consuming economies. and third, there was the impact of the eurozone which he is of course spoken at length about. all those things had impact not just on the gdp on this country but basically every western democracy in the world. had impact on some of the emerging economies. he makes a good point about capital investment and i think he speaks with experience that it is often difficult to get these projects out of the door. we are speeding up the projects. the capital we have allocated is more than than the next two years -- are due to start. they have commission in the next two years. >> is the chancellor i wear that since he sat down, the market of the party opposite have given their verdict? and the answer is this. the latest 10 year bond rate for
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italy is 4.5%, france 2%, just over in fact, and the british bonds are only 1.8%. it's the markets the count and not the party that caused the problem in the first place. [shouting] >> my honorable friend reminds us that we do get a daily verdict on the credibility of our economic policy from bond investors and we're borrowing money more deeply than anyone has done my job before us. there's a real benefit for taxpayers and members of the public in that. we have saved 33 billion pounds in debt interest that we are forecast to have to pay in 2010, and as i said in my statement that is more than the entire defense budget. >> dennis skinner. >> [inaudible] just like on previous occasions like in 2010, when he made his first statement, when it was stripped bare it was a totally different
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story. then in 2010 he promised -- [inaudible], and here we are two and a half years later, call the national health service. [inaudible] never changes. now, instead of being -- [inaudible] now as chancellor of the exchequer he wrecks the economy. >> i'm not sure that personal attack warrants a proper reply. [shouting] >> mary macleod. >> thank you, mr. speaker. [inaudible] 1.2 million jobs in the private sector, my constituency went from 30 to 1300 by 2015. does my right honorable friend agree with me that this
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governments rebalancing the economy and encouraging -- [inaudible] >> well, my honorable friend is right. jobs are being created. of course, it is a tough economic situation. it's a tough economic situation in every western continent. we are we balancing our economy. one of the things i've sought to do, it will attract newspaper headlines but i'm trying to expand our export promotion to make sure it is better, encouraging exports investment, making sure overseas changes of commerce for britain are better in these emerging economies. all these things are so important because one of the big strategic mistakes i think we made as a country in the last 15 years was we did not expand in the same way that for example, germany did. our market share in those emerging economies. >> john denham. >> mr. speaker, i've heard the chancellor make a number of statements to this house. is it a fair summer to say that every time he comes he's told us
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the economy hasn't grown since last time, he is planning to borrow more than last time he was here? spending on public service is going to be cut more than last time he was here. growth in the future is going to be less than he told us last time he was here. and envy of that record should he be quite so pleased with himself? [laughter] >> what i would say to the right honorable gentleman is that this government came in and made 2010, picking up the pieces of an incredibly difficult economic inheritance. we were recovering from the deepest recession since second world war which as i pointed out in my statement was an over 6% contraction in the economy which puts into some context the numbers today, and we have been given with the problems of the banking system. despite all that we have made progress. we got credibility and the bond markets as my honorable friend says. the deficit has come down. jobs are being created. it is a difficult situation but
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we are on the right track you're going back as he was just would be a complete disaster. >> thank you, mr. speaker. democratic priorities will be delivering 10,000 pounds worth of tax prepaid for every working family and the country, effective taxes on the wealthy, and closing down opportunities for tax evasion and tax avoidance. so would the chancellor agree with me that today's very well -- welcome news in the personal tax thresholds puts us within touching distance of the 10,000 pounds, restriction on tax relief on pension contributions for the very rich and more tackle effectively tax evasion and tax avoidance -- [inaudible] is committed to tax fairness even in very difficult times? >> i do agree with my honorable friend. i think it is worth remembering that we put together these very difficult statements and the like in a coalition, and we're
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able to do michigan the rest of the world that britain has strong and decisive government. and i'm grateful to my liberal democrat colleagues have helped me in this, and i hope both liberal democrats and conservatives celebrate the increase in the personal allowance. there are many conservatives who also wanted to achieve that. is also something of course liberal democrats -- shows we're helping working people even in these very difficult times. >> some of the positive impacts of this -- including saving people increase in their electricity bills, extension of the carbon price floors, and the 135 million pounds of capital spending. but i ask the chancellor this. given the rocky road is presented and the credibility he has on the markets, could he not find his way of borrowing more money for infrastructure
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projects to create jobs and keep people on the dole? >> counselor? >> first of all can i welcome the support is given to some of the measures we have taken to help the northern irish economy, and i'm well aware there are particular problems northern irish economy. the banking system which require even more attention, and i've always sought to respond to proposals from the executive, a specific case of the transatlantic flights, for example. what i would say to him, however more generally, is we are committing additional funding to infrastructure. we want infrastructure to be in northern ireland but also guaranteeing infrastructure projects across the united kingdom, 10 billion pounds a projects have qualified now for that. that scheme is available to begin in northern ireland, and if executive wants to talk to the treasury about what more we can do to encourage, i would be
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very happy for those discussions. >> can i welcome my right honorable friend proposal, particularly for the extension of the expenditure on the infrastructure plan? that can ask him does he ensure that transport policy is fully integrated? [inaudible] completely ignore any chance we might have -- [inaudible] building or announcing a railway if it does not connect as it could be to our major international hub. with the personal look into this? >> well, the first thing i would say to my right honorable friend is of course i understand why she speaks on behalf of their constituents who are affected by the high speed treatment. i think it's the right infrastructure for our country and i think it will help change economic geography of britain by connecting t o